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What is the plastic packaging tax? Everything a UK business owner needs to know

Introduced on 1 April 2022, the UK’s Plastic Packaging Tax (PPT) is a significant legislative measure aimed at encouraging businesses to use more recycled material in plastic packaging. This tax is a part of the government’s broader strategy to tackle plastic waste and promote environmental sustainability. Understanding this tax is crucial for business owners, as it impacts sourcing, production, and financial strategies.

Overview of the plastic packaging tax

The Plastic Packaging Tax applies to plastic packaging components manufactured in or imported into the UK. It targets packaging with less than 30% recycled plastic content. The rate is set at £200 per metric tonne of plastic packaging. Both imported plastic packaging and components produced domestically that do not meet the recycled content threshold are subject to this tax.

Who needs to register for the plastic packaging tax?

Businesses need to register for the PPT if they have manufactured or imported 10 tonnes or more of plastic packaging within the last 12 months or expect to do so in the next 30 days. The responsibility falls on manufacturers and importers to keep accurate records, perform necessary calculations, and ensure compliance.

Key responsibilities for business owners

  1. Registration: If your business hits the threshold for taxable plastic, you must register for the PPT.
  2. Record-keeping: Maintain detailed records of all manufactured or imported plastic packaging.
  3. Tax returns: Submit regular returns and pay any tax due to HM Revenue and Customs (HMRC).

Exemptions and reliefs

There are specific exemptions from the tax. These include:

  • Plastic packaging manufactured or imported for use in medical products.
  • Transport packaging used on imported goods.

Additionally, businesses can claim credit for exported plastic packaging that has already been taxed under the PPT.

Impact on business operations

The introduction of the PPT requires businesses to reconsider their packaging choices. For many, this will mean a shift towards sourcing or producing packaging with higher recycled content to avoid the tax. While this may initially increase costs or complicate supply chains, it can also serve as a catalyst for innovation and improved sustainability practices.

Long-term benefits

Adopting more environmentally friendly practices could enhance a company’s reputation and align with consumer preferences for sustainable products. Over time, the increased demand for recycled plastics could help reduce the costs of these materials as the market adjusts and expands.

How to prepare

  • Audit your current use of plastic packaging to understand how much of your material is liable for the tax.
  • Explore alternative materials and suppliers that offer higher recycled content.
  • Consult with tax professionals to ensure compliance and explore all available tax credits and exemptions.


The Plastic Packaging Tax presents both a challenge and an opportunity for UK business owners. By understanding and adapting to these regulations, businesses can not only comply with the law but also contribute to a more sustainable future. As the market for recycled plastics grows and evolves, the early adopters of these changes may well find themselves at a competitive advantage.

FAQ about the plastic packaging tax

What exactly qualifies as ‘plastic packaging’ under the tax?

Plastic packaging is considered any packaging that is predominantly plastic by weight. This includes both single and multi-material packaging where plastic is the main component. It applies to packaging that is used for the containment, protection, handling, delivery, and presentation of goods.

Does the tax apply to biodegradable plastics?

Yes, the Plastic Packaging Tax applies to biodegradable, compostable, and oxo-degradable plastics as well. The key factor is the amount of recycled plastic content within the packaging, not whether the plastic is biodegradable.

Are there penalties for non-compliance?

Failing to register for the tax, not keeping accurate records, or not paying the tax can lead to penalties. It’s essential to comply with the regulations to avoid any fines or legal issues.

Can I claim back the tax if I export my products?

Yes, if you export plastic packaging within 12 months of paying the tax, you can claim a credit or refund for the tax paid. This is intended to ensure fairness for businesses that operate both domestically and internationally.

How do I register for the plastic packaging tax?

Businesses can register for the PPT through the HM Revenue and Customs (HMRC) website. You will need to provide details about your business and the amount of plastic packaging you manufacture or import.

What happens if my business is close to the 10-tonne threshold?

It’s important to monitor your production or import levels closely. If you anticipate that your business will reach the threshold, you should prepare to register for the tax. Even if you are just below the threshold, maintaining good records is advisable to ensure compliance if your business grows.

How often do I need to file returns for the plastic packaging tax?

Businesses must file their Plastic Packaging Tax returns quarterly. Make sure to keep track of all relevant dates and deadlines to ensure timely and accurate submissions.

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